Help to Buy: Equity Loan scheme 2021-2023

Help to Buy: Equity Loan (2021-23), England

First time homebuyers who meet affordability and lending terms can borrow an equity loan of up to 20% (40% in London) of the sale price of a new build home. Applications for the Help to Buy 2021-2023 scheme can be made from Autumn 2020.

How much you can spend on your home will depend on which region it is in.

 

Region Price cap for Help to Buy
homes April 2021 to March 2023
North East £186,100
North West £224,400
Yorkshire and The Humber £228,100
East Midlands £261,900
West Midlands £255,600
East of England £407,400
London £600,000
South East £437,600
South West £349,000

 

You must fund at least 80% (60% in London) of the sale price with a mortgage and at least a 5% deposit.

You won’t be charged interest on the loan for the first five years. Interest fees start at 1.75% and rise each year in April by the Consumer Prices Index including owner occupiers’ housing costs (CPIH) plus 2%. You pay a monthly management fee of £1 for the life of the loan.

Homes England, the lender, secures the equity loan as a second charge on your Help to Buy home. You must repay the equity loan when you sell the home, pay off your mortgage or reach the end of your loan term. But, you can repay all or 10% chunks of the loan any time before then.

An independent financial adviser and a solicitor may be able to help you decide if Help to Buy is right for you.

Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it.